Toyota Motor Corporation (Toyota) and Mazda Motor Corporation (Mazda) solidify their partnership that began in 2015 by agreeing on a new deal that involves the development of next-generation vehicles and safety technologies plus the acquisition of mutual shares.

The business alliance between the two companies involves looking into establishing an equally funded US$ 1.6 billion manufacturing plant in the United States with the capacity to produce 300,000 vehicles per year by 2021. In addition, the two companies will also jointly develop electric vehicles for the global market and work together on improving connected-vehicle technology and advanced safety features (Mazda set to participate in Toyota’s vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) program).

Toyota and Mazda will also share products in Japan and the global market (Mazda supplies Toyota a compact sedan in North American while Toyota is set to provide Mazda a commercial van in Japan).

To reinforce the partnership, Toyota is set to receive newly issued Mazda common stock amounting to 31,928,500 shares while Mazda receives Toyota shares of equivalent value.

"The greatest fruit of our partnership with Mazda is that we have found a new partner who truly loves cars. It has also sparked Toyota's competitive spirit, increasing our sense of not wanting to be bested by Mazda. This is a partnership in which those who are passionate about cars will work together to make ever-better cars. It is also the realization of our desire to never let cars become commodities," said Toyota president Akio Toyoda.

"Nothing would please me more than if, through this alliance, we can help to energize the auto industry and create more car fans by bringing together two competitive spirits to spur each other on, leading to innovations and fostering talent and leaders," said Mazda president and CEO Masamichi Kogai.